Plan to manufacture aviation fuel from Australian canola well underway
Published Mon 16 Jun 2025
Plan to manufacture aviation fuel from Australian canola well underway - ABC News
Australian farmers could soon be fuelling jets with a low-carbon liquid fuel made from canola.
Aviation accounts for about 2.5 per cent of global carbon dioxide emissions and is difficult to decarbonise.
A push to replace fossil fuel with sustainable aviation fuels (SAF) is raising the prospect of a new market for the Australian-grown oilseed.
Canola, known for its pretty yellow flowers, is harvested in grain-growing regions around the country, with the majority exported to Europe for biofuel production.
Liquid fuel made from canola
Australian-owned fuel company Ampol, publicly-listed GrainCorp, and industry super fund IFM Investors are working on a plan to refine canola oil in Australia for use in the aviation industry.
Subject to a feasibility study, GrainCorp expects to establish a canola crush with capacity to process 1 million tonnes a year, almost twice the capacity of its existing crush at Numurkah in northern Victoria.
Australian canola is typically exported to the EU for biofuels production. (ABC Rural: Jo Prendergast)
It hasn't identified a site for the prospective crush yet, but Western Australia or New South Wales are the more likely options.
Canola meal would be extracted for use as livestock feed and the oil transported to Ampol's Brisbane refinery, to be manufactured into a renewable diesel and processed into SAF.
Brent Merrick, a general manager at Ampol, said the project would require a multi-billion-dollar investment but could come to market relatively quickly.
Ampol is working with GrainCorp on a plan for its Brisbane refinery to manufacture sustainable aviation fuel from canola. (ABC News: Lucas Hill)
"Our plan is to aim for the sort of 2030 time range for production, and engineering is well underway," Mr Merrick said.
"It's not something that comes across your desk every day; the chance to make such a material change in how the energy mix drives the country.
"It is a big deal, it is exciting," he said.
Industry seeks assistance
Before the canola-fed fuel business gets the green light, project managers are seeking federal government assistance.
"The cost of SAF today is more expensive than jet fuel, so we need some temporary support to stand up this industry and get it going," GrainCorp general manager nutrition and energy, Don Campbell, told Landline.
"How much? That's what we're working on."
Don Campbell expects 80 per cent of jet fuel will be sustainable aviation fuel by 2050. (ABC Landline: Simon Beardsell)
Assistance could include mandates for airlines to use a certain percentage of renewable fuel, subsidies for start-up costs associated with manufacturing, and help to ensure the final product meets global emissions reduction certification standards.
Australian airlines already using SAF
Last month Qantas imported close to 2 million litres of SAF from Malaysia, enough so that once it is blended it will fly the equivalent of 900 flights between Sydney and Auckland.
"We see that the forecast of 80 per cent of jet fuel by 2050 to be sustainable aviation fuel, whereas today we're using barely less than 1 per cent,"Mr Campbell said.
Planes account for about 2.5 per cent of global carbon dioxide emissions. (AAP: Dan Himbrechts)
Last year the federal government committed more than $30 million for the development of an SAF industry using renewable feedstock.
It included $8 million for Ampol and $6 million for GrainCorp.
Speaking at GrainCorp's Newcastle port facility at the time of the funding announcement, Transport Minister Catherine King said establishing a low-carbon liquid fuel industry in Australia made sense.
"It's ridiculous that frankly we are exporting more and more of our feedstock to other countries to make low-carbon liquid fuels,"Ms King said.
Transport Minister Catherine King wants to see Australia produce low-carbon liquid fuels. (AAP: Lukas Coch)
"These are things we should be making here in Australia. It's good for farmers, it's good for our manufacturing sector, it's good for sectors like GrainCorp."
Earlier this year, the government also announced $250 million from its Future Made in Australia Fund would be provided as grants to accelerate a domestic low-carbon liquid fuels industry.
SAF would boost economy, fuel security
The CSIRO has estimated an Australian low-carbon liquid fuel industry, reliant on a variety of technologies and feedstock, could contribute up to $12 billion a year to the economy.
Zach Whale, a spokesperson for the farm lobby group GrainGrowers, believes much of that benefit would be felt in regional communities.
Oil is extracted from canola seed at high temperatures during the crush process, part of a system that could one day produce jet fuel. (ABC Landline: Simon Beardsell)
"We also get greater fuel security and we get some market diversification for our farmers, so I think it's all upside for Australian agriculture and the economy more generally,"Mr Whale said.
"If demand does really spike, we don't anticipate every farmer turning away from wheat and chickpeas and barley.
"We think canola will just remain a mainstay, but with greater domestic demand and hopefully favourable pricing for our growers."
Food and fuel, or food vs fuel
CSIRO senior research scientist Cathryn O'Sullivan said SAF made from a variety of feedstock, including tallow, sugar and canola, needed to be certified to ensure any carbon abatement stacked up.
"We need really strong sustainability measures and metrics to make sure that we get that balance right between food and fuel and carbon abatement in these systems," Dr O'Sullivan said.
Meal extracted from canola oilseed is used to feed livestock. (ABC Landline: Simon Beardsell)
"I don't really consider [it] a roadblock, but it's a factor that needs to be considered in making sure these things are sustainable, and they don't compete with our food system."
She said canola was a good example as it produced fuel and food.
"Our canola gets crushed and the oil can go into human consumption or it can go into fuel production, and the remaining canola meal that's left over goes into animal feed, so from one product you're getting both food and fuel," Dr O'Sullivan said.
GrainCorp's northern Victorian canola plant manufactures canola for food such as margarine, chocolate and chips, as well as animal feed. (ABC Landline: Simon Beardsell)
Mr Whale said a canola-fed SAF sector would not come at the detriment of food production.
"It's definitely not a case of food versus fuel. It's food and fuel,"Mr Whale said.
This year Australian grain growers are forecast to produce 5.7 million tonnes of canola from 3.4 million hectares.